Trump Executive Order Hacks At Obamacare, With More To Come

Daniel Fisher
,
Forbes Staff
I cover finance, the law, and how the two interact.

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President Trump signed a flurry of executive orders today including a broadly worded directive instructing agency chiefs to "exercise all authority" to minimize the economic burdens of the Affordable Care Act. The rest of his orders covered mostly housekeeping issues including a waiver allowing retired Gen. James Mattis serve as defense secretary. But on Monday he'll really start exercising his pen, according to his senior advisor Kellyanne Conway, who told CBS News “you’ll see him rolling back some of the job killing regulations” former President Barrack Obama issued during his term.

The Obamacare order tells the yet-to-be-appointed Secretary of Health and Human Services and other executive branch officials "to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement" of the Affordable Care Act "that would impose a fiscal burden" on states, individuals, or makers of medical devices and other medical products and services. Medical-device manufacturers, with some Democratic support, have been pushing to reverse a provision of the law that imposed a special tax on their products.

Since much of Obamacare is written into the statute or has been implemented through rules that have the effect of law, it remains to be seen how far the executive branch can take the order to eliminate aspects of the law Republicans have objected to. The order instructs officials to "encourage the development of a free and open market in interstate commerce," for example, which could generate fierce resistance from state insurance regulators who want to maintain control over insurance products sold in their states. The order also reminds agency chiefs to comply with the Administrative Procedure Act, which lays out a lengthy notice-and-comment process for passing or reversing regulatory rules. More on how it may be implemented from my colleague Kelly Phillips Erb here.

More orders reversing Obama's executive orders are likely to come Monday. Among them are likely to be executive order No. 13658, establishing a $10.10 minimum hourly wage for federal contractors and similar measures requiring contractors to report labor-law violations to government procurement officers and provide paid sick leave to their employees. He'll also move quickly to dismantle Obama's DACA policy granting quasi-legal residency status to millions of illegal immigrants who came here as children.

Cutting deeper into the Obama legacy will take time and careful lawyering.There's a hierarchy of actions that emanate from the White House, some easy to reverse and others much harder.

Executive orders: These are presidential decrees governing the executive-branch agencies including Treasury, Labor and Defense. They don't have the force of law and can be reversed by the incoming president.

Discretionary agency directives: These are interpretations of federal law by White House lawyers that also don't have the effect of law, but can drive policy as long as they are in force. The Obama administration's interpretation of the word "sex" in Title IX to mean a subjective sense of gender instead of biological sex required public schools to allow transgender students to use the bathrooms of their choice. These also can be immediately reversed.

Agency rules: These are regulations that have the force of law, passed by federal agencies operating under a delegation of authority from Congress. Reversing them requires the same lengthy process as putting them in place, including a notice-and-comment period and a factual justification for the change.

Trump hasn't telegraphed exactly which orders and regulations he'll try to reverse starting Monday but DACA, the rules for federal contractors and Title IX are obvious candidates. He'll also probably try to reverse the Labor Dept.'s rule extending fiduciary-duty obligations to stockbrokers handling retirement accounts and rules issued by the Labor Dept. and the National Labor Relations Board making franchisers liable for actions of their franchisees and making it easier for unions to organize even small subgroups of employees.

Rolling back Obama's labor and environmental regulations will be more difficult, however. Agency rules that were published in the Federal Register within 60 legislative days can be reversed under the Congressional Review Act, although it has only been used once, to repeal the Clinton administration’s ergonomic standards. Reversing older rules requires a full-blown administrative process including establishing a factual record to support the change and giving objectors time and opportunity to comment.

There are other tactics.

As explained in this article by Crowell & Moring Partner Thomas Lorenzen, the incoming administration could try to admit defeat in the legal challenge over the Clean Power Plan, which requires the shutdown of a significant percentage of the nation's coal-fired power plant fleet. But that maneuver would be opposed by environmental groups and states that have intervened in the litigation in federal court in Washington. The Obama tried this tactic to reverse a surface-mining rule issued in the last days of the Bush administration but a judge refused to go along, saying it would circumvent the statutory process for reversing a rule under the Administrative Procedure Act.

Trump could also refuse to enforce Obama's rules, but states, environmentalists and labor unions will certainly sue to force the administration enforce the law as promulgated through the regulations. When the Bush administration refused to decide whether CO2 was an "air pollutant" under the Clean Air Act, the U.S. Supreme Court forced it to in the 2007 decision Massachusetts v. EPA.